CONTRACT OF SALE
THIS AGREEMENT, dated as of August 17, 2006, is made
between AEI Real Estate Fund XVIII Limited Partnership, a
Minnesota limited partnership ("AEI XVIII"), AEI Income & Growth
Fund XXII Limited Partnership, a Minnesota limited partnership
("AEI XXII"), AEI Income & Growth Fund 24 LLC, a Delaware limited
liability company ("AEI 24"), Robert F. Hajicek and Lillian E.
Hajicek, as individuals ("RHLH"), Jeffrey D. Harmon and Sylvia M.
Harmon, as individuals ("JHSH"), Charles E. Miller III, as an
individual ("CEM"), Christopher B. Miller, as an individual
("CBM"), and Elizabeth V.H. Miller, as an individual ("EM";
together with AEI XVIII, AEI XXII, AEI 24, RHLH, JHSH, CEM and
CBM, hereinafter collectively referred to as "Seller"), as tenants
in common and Compson Holding Corporation, a Florida corporation
("Purchaser").
WITNESSETH:
WHEREAS, Seller desires to sell to Purchaser, and
Purchaser desires to purchase from Seller, all those certain
properties described in Section 1.01 on the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the premises and of
the mutual covenants and agreements hereinafter set forth, and
subject to the terms and conditions hereof, Seller and Purchaser
hereby covenant and agree as follows:
ARTICLE 1
THE PROPERTY; PURCHASE PRICE; ESCROW
SECTION 1.01. THE PROPERTY. Seller hereby agrees to sell
and transfer, and Purchaser hereby agrees to purchase and acquire,
upon the terms and conditions hereof, the following:
(a) that certain plot, piece and parcel of land known as Garden
Ridge, located in the State of Texas, County of Montgomery, and
described on Schedule 1.01(a) annexed hereto (the "Land");
(b) the interest of Seller in the buildings and improvements
located in or on the Land (collectively, the "Improvements");
(c) [Intentionally omitted];
(d) all of Seller's interest in all easements, licenses, rights
and appurtenances relating to the Land or the Improvements;
(e) all of Seller's interest, if any, in and to any land lying in
the bed of any street, road or avenue opened or proposed, in front
of or adjoining the Land, to the center line thereof;
(f) all of Seller's right, title and interest, as lessor, in and
to that certain lease with Garden Ridge LP, a Texas limited
partnership ("Garden Ridge") specified on Schedule 1.01(f) annexed
hereto together with all amendments and modifications thereto (the
"Lease"), and all rents, issues and profits thereof and therefrom,
and all security deposits, guarantees, if any, unearned common
area maintenance assessments and other deposits made in respect
thereof;
(g) all of Seller's interest, if any, in the building and/or
equipment warranties which remain in effect at Closing (as
hereinafter defined), if any, exclusively relating to any of the
Improvements and Personal Property (the "Warranties"); and
(h) all of Seller's interest, if any, in the certificates,
licenses, permits, authorizations and approvals actually issued
for or with respect to the Property by governmental and quasi-
governmental authorities having jurisdiction ("Licenses"), to the
extent transferable.
The Land, the Improvements, the Lease, the Warranties, the
Licenses and all other rights, improvements and property specified
above in this Section 1.01 relating thereto, is referred to
hereinafter, collectively, as the "Property".
SECTION 1.02. PURCHASE PRICE. The purchase price for the
Property (the "Purchase Price") is Nine Million Three Hundred
Fifty Thousand Dollars ($9,350,000), payable as follows:
(a) Upon execution and delivery of this Agreement,
Seventy-Five Thousand Dollars ($75,000) (the "Initial Downpayment")
shall be delivered by Purchaser to Fidelity National Title
Insurance Company, as escrow agent ("Escrow Agent"), in Phoenix, AZ;
Attention: Anne Bostick, by wire transfer of same day funds per
wire instructions to be provided prior to closing.
(b) On or prior to the end of the Approval Period (as
hereinafter defined), Seventy-Five Thousand Dollars ($75,000) (the
"Additional Downpayment" and, together with the Initial
Downpayment, the "Downpayment") shall be delivered by Purchaser to
Escrow Agent, by wire transfer of same day funds to Escrow Agent's
account as specified in subsection (a) above. The Downpayment shall
be held by Escrow Agent in an interest bearing account in accordance
with the terms of this Agreement until the Closing (as hereinafter
defined) or termination of this Agreement, and all interest
accrued on the Downpayment shall be paid to the party who receives
the Downpayment. An amount of $1,000 of the Downpayment that
Purchaser has paid to Seller is for an independent consideration
for Purchaser's right to terminate by tendering such amount
directly to Seller or Seller's agent. If Purchaser terminates
under Section 4.01(d) herein, the Downpayment will be refunded to
Purchaser and Seller will retain the independent consideration.
The independent consideration will be credited to the Purchase
Price upon the Closing.
(c) Purchaser shall pay at the Closing the balance of the
Purchase Price (after crediting the amount of the Downpayment) in
cash, subject to adjustments as provided herein. The Purchase
Price shall be paid by Purchaser to Seller through escrow, by wire
transfer of immediately available funds to the aforementioned account
of Escrow Agent or as Seller shall otherwise direct.
SECTION 1.03. ESCROW. The Downpayment shall be held by
Escrow Agent and disposed of only in accordance with the
following:
(a) Escrow Agent will deliver the Downpayment to Seller
or to Purchaser, as the case may be, under the following
conditions:
(1) to Seller at the Closing upon the consummation
thereof as part of the Purchase Price; or
(ii) to Seller upon receipt of written demand therefor,
stating that Purchaser has defaulted in the performance of this
Agreement; provided, however, that Escrow Agent shall not honor such
demand earlier than the tenth day after Escrow Agent shall have given
notice to Purchaser enclosing a copy of such demand, nor thereafter
if Escrow Agent shall have received written notice of objection from
Purchaser prior to such tenth day; or
(iii) to Purchaser upon receipt of written demand therefor,
which demand shall be received by Escrow Agent on or prior to the
end of the Approval Period, stating that Purchaser is terminating
this Agreement in accordance with Section 4.01(d) herein; or
(iv) to Purchaser upon receipt of written demand therefor (x)
stating that Seller has defaulted in the performance of this
Agreement, or (y) stating that Purchaser is otherwise entitled to
the Downpayment under the terms of this Agreement; provided,
however, that Escrow Agent shall not honor such demand earlier than
the tenth day after Escrow Agent shall have given notice to Seller
enclosing a copy of such demand, nor thereafter if Escrow Agent
shall have received written notice of objection from Seller prior to
such tenth day.
(b) In the event Escrow Agent shall have received a
notice of objection provided for in subsections (a)(ii) or (iv)
above within the time therein prescribed, Escrow Agent shall
continue to hold the Downpayment until (A) Escrow Agent shall have
received written notice signed by Seller and Purchaser directing
the disbursement of the Downpayment, or (B) Escrow Agent, at
Escrow Agent's option, in order to terminate Escrow Agent's duties
as Escrow Agent, shall have deposited the Downpayment in a court
of competent jurisdiction in an action of interpleader, the costs
thereof to be borne by whichever of Seller and Purchaser is the
non-prevailing party, or (C) Escrow Agent shall receive from a
court of competent jurisdiction a certified copy of a judgment or
order, which is final and non-appealable, directing disposition of
the Downpayment.
(c) Escrow Agent may act upon any instrument or other
writing believed by Escrow Agent, in good faith, to be genuine and
to be signed and presented by the proper person, and shall not be
liable in connection with the performance of any duties imposed
upon Escrow Agent by the provisions of this Agreement except for
Escrow Agent's own wilful misconduct or negligence. Escrow Agent
shall have no duties or responsibilities except those set forth
herein. In the event that Escrow Agent shall be uncertain as to
Escrow Agent's duties or rights hereunder, or shall receive
instructions from Purchaser or Seller which, in Escrow Agent's
opinion, are in conflict with any of the provisions hereof, Escrow
Agent shall be entitled to hold
and/or apply the Downpayment pursuant to Section 1.03(b) above and
may decline to take any other action.
(d) Seller and Purchaser, jointly and severally, agree
to indemnify and hold harmless Escrow Agent from and against any and
all costs, claims, damages or expenses, including reasonable
attorneys' fees, that may be incurred by Escrow Agent acting under
this Agreement or to which Escrow Agent may be put in connection
with Escrow Agent acting under this Agreement, except for costs,
claims or damages arising out of Escrow Agent's negligence,
willful misconduct or bad faith.
(e) Seller and Purchaser recognize and acknowledge that Escrow
Agent is serving without compensation and solely as an accommodation
to the parties hereto. Seller and Purchaser recognize and
acknowledge that Escrow Agent undertakes to perform only the duties
that are expressly set forth herein and that Escrow Agent shall not
be bound by any other agreement between Seller and Purchaser,
whether or not Escrow Agent has knowledge thereof.
ARTICLE 2
THE CLOSING
SECTION 2.01. THE CLOSING. The closing of the
transactions contemplated hereby (the "Closing") shall take place
at 10:00 A.M. (Eastern Standard time) on or about the date that is
thirty (30) days following the end of the Approval Period, through
an "escrow closing" at the office of the Escrow Agent, or at such
other time or such other place as Seller and Purchaser shall
mutually agree. The time and date of the Closing are herein
referred to as the "Closing Date." Notwithstanding the foregoing
or anything to the contrary contained in this Agreement, Purchaser
shall have the right, exercised by written notice to Seller given
at least five (5) days before the scheduled Closing Date, to
extend the Closing for an additional period not to exceed fifteen
(15) business days, provided that Purchaser shall wire to Escrow
Agent an additional deposit of Twenty-Five Thousand Dollars
($25,000) (which amount shall be considered additional Downpayment
hereunder) concurrently with Purchaser's delivery of the extension
notice as aforesaid.
ARTICLE 3
TITLE
SECTION 3.01. TITLE TO THE PROPERTY. SELLER agrees to
convey good, valid and insurable fee simple title to the Property
and Purchaser agrees to purchase the same, subject only to the
Permitted Title Exceptions (as hereinafter defined):
(a) [Intentionally omitted].
(b) Seller shall promptly order a title commitment (the "Title
Commitment") from Fidelity National Title Insurance Company (the
"Title Company") and shall deliver same to Purchaser within fifteen
(15) days after the Effective Date. Purchaser shall (i) within ten
(10)
days following receipt of the Title Commitment and a survey (the
"Survey") covering the Property (but in no event later than the
expiration of the Approval Period), and (ii) within three (3) days
of receipt of any update to the Title Commitment or the Survey and
only with respect to an exception, matter or item first appearing
on such update (but not later than the Closing Date), deliver
written notice (a "Title Notice") to Seller setting forth any
liens or encumbrances affecting, or other defects in or objections
to, title to the Property, or any matters set forth on the Survey,
that are not satisfactory to Purchaser in its sole judgment
("Purchaser's Objections"). Any exceptions appearing on the Title
Commitment, and any matters noted on the Survey, and not objected
to by Purchaser in accordance with this Subsection 3.01(b) shall
be deemed "Permitted Title Exceptions".
(c) If Purchaser notifies Seller of Purchaser's Objections
pursuant to a Title Notice delivered in accordance with Section
3.01(b) above, Seller shall have no obligation to remove any of Purchaser's
Objections (other than Liens (as hereinafter defined)). Seller shall
respond in writing to any Title Notice timely given by Purchaser
within five (5) business days of Seller's receipt of such Title
Notice, disclosing whether or not Seller will attempt to cure any
Purchaser's Objections, provided that Seller's decision to attempt
to cure shall not be deemed to obligate Seller to accomplish same.
Seller's failure to remove Purchaser's Objections (other than Liens)
shall not be a default on Seller's part, but shall be an inability
to perform within the meaning of Section 12.01(b). If Seller has not
removed Purchaser's Objections as of the Closing Date (despite
Seller's reasonable efforts to do so, which shall not include an
obligation on the part of Seller to institute litigation or
otherwise incur more than diminimis costs, except for the removal of
Liens and other monetary liens up to the Cure Limit (as such terms
are defined below)), Seller shall so notify Purchaser in writing. If
such written notice is given by Seller, Purchaser shall either elect
(i) to terminate this Agreement by giving written notice to Seller,
in which event the provisions of Section 12.01(b) shall apply, or
(ii) to perform all of Purchaser's obligations hereunder and accept
title to the Property subject to such uncured Purchaser's Objections
without any abatement of the Purchase Price or liability on the part
of Seller. Purchaser shall make its election between clauses (i) and
(ii) of the immediately preceding sentence by written notice to
Seller given not later than 5:00 P.M. Eastern Standard time on the
third (3rd) business day after the giving of the written notice by
Seller that it has not cured any Purchaser's Objection, but in no
event later than the Closing Date. If Purchaser shall fail to give
such written notice as aforesaid, it shall be deemed to have elected
clause (i) above.
(d) Notwithstanding the foregoing provisions of this Section
3.01 to the contrary, Seller, at Seller's sole cost and expense, shall be
required to remove or to cause to be removed of record at or prior
to the Closing the following (collectively, the "Liens"): (i) the
lien of any mortgage which encumbers the Property as of the date of
the Closing; (ii) any liens which Seller places or allows to be
placed on the Property other than liens placed on the Property by
Garden Ridge unless liens to which Seller did consent, including
mechanics liens and judgments; and (iii) any other liens or
encumbrances against the Property which can be cured by the payment
of money in liquidated amounts not exceeding the sum of $100,000.00
(the "Cure Limit"). If Seller elects not to remove liens or
encumbrances which exceed the Cure Limit, as specified in clause
(iii) of the preceding sentence, Purchaser may nevertheless accept
such title as Seller can convey, in which event Purchaser shall be
entitled to a reduction in the Purchase Price
in an amount equal to the Cure Limit.
ARTICLE 4
INSPECTIONS; APPROVALS
SECTION 4.01. (a) Commencing upon the full execution of this
Agreement by all parties hereto and continuing until the Closing
or earlier termination of this Agreement, Seller agrees to allow
Purchaser or Purchaser's agents or representatives reasonable
access to the Property for purposes of any visual, physical or
environmental inspection of the Property and review of the Lease,
Service Contracts (as such terms are hereinafter defined),
operating data, expenses and other matters. Any and all
inspections shall be at Purchaser's expense.
(b) Purchaser agrees that, in making any physical or
environmental inspections of the Property, Purchaser and
Purchaser's agents (i) will not unreasonably interfere with the
activities of Seller or any persons occupying or providing
services at the Property, (ii) will not reveal to any third party
not approved by Seller the results of its inspections (other than
to Purchaser's legal counsel, lenders and advisors, if any), and
(iii) will restore promptly any physical damage caused by the
inspections. Purchaser shall give Seller at least twenty-four (24)
hours prior notice of its intention to conduct any inspections.
Purchaser agrees to indemnify, defend, and hold Seller and its
shareholders, directors, employees, tenants and agents free and
harmless from any and all loss, injury, damage, claim, lien, cost
or expense, including attorneys' fees and disbursements, arising
out of a breach of the foregoing agreements by Purchaser in
connection with the inspection of the Property.
(c) Seller shall deliver the following items relating to the
Property to Purchaser within two (2) business days after full
execution of this Agreement:
(i) The Final Assumption Order (as defined in the Second
Amendment to the Lease, dated as of August 11, 2004).
(ii) Annual operating statements and capital expenditures for
calendar year 2004 and for calendar year 2005 and 2006 to the extent
obtainable by Seller.
(iii) Tenant sales history (minimum of previous three years)
for Garden Ridge if Garden Ridge is required to report sales in Seller's
possession;
(iv) Copies of current real estate tax assessment notices and bills
and all Service Contracts;
(v) A list of leasing commissions and tenant improvements to be
discharged;
(vi) Copies of the most recent survey and title report and the
existing owner's title insurance policy;
(vii) Copies of all available environmental and physical
condition reports and notices (including all Phase I, Phase II, ADA
and soil reports for the Property, as available), in each case, to
the extent in Seller's possession;
(viii) A copy of all "as built" plans, specifications, permits
and entitlements for the Property in Seller's possession;
(ix) A description of all pending or existing litigation involving
the Property, if any; and
(x) Common area maintenance and real estate tax recovery
reconciliation for the most recent year for Garden Ridge.
Seller will permit Purchaser and its representatives to
meet with representatives and agents of Seller to discuss any and
all aspects of the Property.
(d) On or prior to 5:00 p.m. (Eastern Standard time) on
the date that is thirty (30) days following the mutual execution
of this Agreement by Seller and Purchaser (the period commencing
on the date of this Agreement and ending on such date shall be
hereinafter referred to as the "Approval Period"), Purchaser shall
determine, in its sole and absolute discretion, whether the
Property is a suitable investment for its purposes. If, as a
result of its various investigations, Purchaser determines that
the Property is not a suitable investment for its purposes,
Purchaser shall have the right, exercisable in Purchaser's sole
and absolute discretion, by giving Seller written notice (the
"Termination Notice") on or prior to the end of the Approval
Period to terminate its obligation to purchase the Property. If
the Termination Notice is timely given, Purchaser shall direct
Escrow Agent to return the Downpayment to Purchaser and, upon such
return, this Agreement shall be deemed terminated and of no
further force and effect and neither Seller nor Purchaser shall
have any further liability or obligation to the other hereunder,
except for such liabilities or obligations as are specifically
stated to survive the termination of this Agreement. Purchaser's
failure to deliver the Termination Notice on or prior to the end
of the Approval Period shall be deemed to be a waiver of
Purchaser's right to terminate this Agreement pursuant to this
Subsection (d). Notwithstanding the foregoing, Purchaser's failure
to deliver to Escrow Agent the Additional Deposit prior to 5:00
p.m. (Eastern Standard time) on the last day of the Approval
Period, shall be deemed to be the timely delivery by Purchaser of
the Termination Notice, in which case this Agreement shall
terminate as aforesaid.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller
hereby represents and warrants to Purchaser, subject to the
limitations set forth in this Article 5, that as of the date
hereof:
(a) (i) AEI XVIII is a limited partnership that has
been duly formed and is validly existing and in good standing
under the laws of the State of Minnesota;
(ii)AEI XXII is a limited partnership that has
been duly fonned and is validly existing and in good standing
under the laws of the State of Minnesota; and
(iii) AEI 24 is a limited liability company that
has been duly formed and is validly existing and in good
standing under the laws of the State of Delaware.
(b) This Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
action on the part of each tenant in common comprising Seller and,
upon the assumption that this Agreement constitutes a legal, valid
and binding obligation of Purchaser, this Agreement constitutes a
legal, valid and binding obligation of each tenant in common
comprising Seller.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Seller do
not (i) violate or conflict with the certificates of limited
partnership, certificate of formation, partnership agreements or
operating agreement of any tenant in common comprising Seller that
is an entity, (ii) violate or conflict with any judgment, decree or
order of any court applicable to or affecting Seller, (iii) breach
the provisions of, or constitute a default under, any contract,
agreement, instrument or obligation to which Seller is a party or by
which Seller is bound and which relates to the Property which will
remain uncured as of Closing, or (iv) violate or conflict with any
law applicable to Seller.
(d) None of the tenants in common comprising Seller is a
"foreign person" within the meaning of section 1445 of the Internal
Revenue Code of 1986, as amended (the "Code").
(e) No petition in bankruptcy (voluntary or otherwise),
assignment for the benefit of creditors, or petition seeking
reorganization or arrangement or other action under Federal or State
bankruptcy laws is pending against or contemplated by any tenant in
common comprising Seller.
(f) There are no occupancy rights (written or oral), leases or
tenancies presently affecting the Property or any portion thereof
other than pursuant to the Lease. Notwithstanding the foregoing,
Seller makes no representation as to any subleases, licenses or
other occupancy rights presently affecting the Property or any
portion thereof entered into by Garden Ridge and a third party in
respect of which Seller has not granted its consent, however, Seller
has no knowledge of any such subleases, licenses or other occupancy
rights. Seller represents and wan-ants to Purchaser the following
with respect to the Lease:
(i) A true, correct and complete copy of the Lease is
attached hereto as Exhibit A; the Lease is in full force and effect
and has not been modified, supplemented, or amended in any way,
except as attached on Exhibit A annexed hereto; and the Lease
represents the entire agreement between Seller, as landlord
thereunder, and Garden Ridge;
(ii) The amount of fixed monthly rent is $61,100;
(iii) To the best of Seller's knowledge, all work to be
performed for Garden Ridge under the Lease, if any, has been
performed as required and has been
accepted by Garden Ridge; and there are no outstanding
payments, free rent, or other payments, credits,
allowances or abatements due Garden Ridge;
(iv) Neither Seller, as landlord, nor, to Seller's knowledge,
Garden Ridge, is in default, and, to Seller's knowledge, Garden
Ridge has no offset, defense, deduction or claim against Seller,
as landlord; and
(v) Garden Ridge has no right or option to purchase all or any
part of the Property or to occupy any additional space at the
Property.
(g) There are no service, maintenance and supply contracts
affecting the Property in effect on the date hereof (the
"Service Contracts") except those Service Contracts entered into
between Garden Ridge and its third party vendors. Seller is not
a party to nor bound by such Service Contracts.
(h) Annexed hereto as Schedule 5.01(h) is a complete list of
all brokerage, leasing or listing agreements (collectively,
"Brokerage Agreements") affecting the Property or any space
covered by the Lease in effect on the date hereof. Seller has
delivered or made available to Purchaser true and complete
copies of each of the Brokerage Agreements.
(i) Seller has not granted to any person or entity (other than
Purchaser) a right of first refusal option or other right to
acquire the Property or any interest therein, and, to Seller's
knowledge, no such rights exist except as may be set forth in
the documents of record reflected in the Title Commitment.
(j) Seller has not received any written notice of special
assessment against the Land for public improvements constructed
prior to the date of this Agreement that will remain unpaid at
Closing.
(k) There are no rental delinquencies existing under the Lease
as of the close of the month immediately preceding the date of
this Agreement.
(l) Seller has not received written notice from any
Governmental Authority (defined below), of: (i) any pending
or threatened condemnation proceedings affecting the Property
or any part thereof; or (ii) except as may disclosed by
Purchaser's Title Commitment and the related municipal
searches received in connection therewith, any material
violations of any laws, rules or regulations relating to the
use or operation of the Property. To Seller's knowledge,
there is not now pending nor is there any proposed or
threatened proceeding for the rezoning of the Property or any
portion thereof.
(m) Except as set forth on Schedule 5.01(m) attached
hereto and for commissions due or that may become due with
respect to renewal or expansion options that may be exercised
following the date hereof, no commission, fee or other
compensation is payable with respect to the Lease and there
is no currently existing obligation, regardless of whether
such obligation is contingent on the passage of time or the
occurrence of any event or both, to pay, either currently or
in the future, any leasing commissions, fees or other
compensation in respect of renewals and extensions of the
Lease or the expansion of the premises covered by the Lease.
There does not currently exist any exclusive or continuing
leasing or brokerage agreements as to any of the space
covered by the Lease that will become the obligation of
Purchaser following Closing.
(n) Except as described in Schedule 5.01(n) attached hereto, no
proceeding, suit or litigation against Seller relating to the Property
or any part thereof is pending or, to Seller's knowledge, threatened
in any court or other tribunal or before any govermnental authority.
(o) Since August 15, 2003, the date of the existing Phase I
environmental report for the Property prepared by HBC Terracon, a copy
of which has been delivered by Seller to Purchaser, Seller has not
ordered, and is not in possession, of any subsequent environmental
reports regarding the Property.
(p) Seller does not own any of the fixtures, systems, machinery,
equipment and items of tangible and intangible personal property
attached to or used in connection with the Land or the Improvements.
SECTION 5.02. PURCHASER'S REPRESENTATIONS AND WARRANTIES.
Purchaser hereby represents and warrants to Seller that:
(a) Purchaser is a limited liability company that has been duly
formed and is validly existing and in good standing under the laws of
the State of Florida.
(b) This Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action
on the part of Purchaser and, upon the assumption that this Agreement
constitutes a legal, valid and binding obligation of Seller, this
Agreement constitutes a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby do not and will
not (i) violate or conflict with the operating agreement or certificate
of formation of Purchaser, (ii) violate or conflict with any judgment,
decree or order of any court applicable to or affecting Purchaser,
(iii) breach the provisions of, or constitute a default under, any
contract, agreement, instrument or obligation to which Purchaser is a
party or by which Purchaser is bound, which remains uncured as of
Closing, or (iv) violate or conflict with any law or governmental
regulation or permit applicable to Purchaser.
(d) No petition in bankruptcy (voluntary or otherwise), assignment
for the benefit of creditors, or petition seeking reorganization or
arrangement or other action under Federal or State bankruptcy laws is
pending against or contemplated by Purchaser.
SECTION 5.03. [Intentionally omitted]
SECTION 5.04. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. (a)
The only representations, warranties and agreements of Seller
hereunder that will survive the Closing are those that are
specifically stated herein to survive. The representations and
warranties of Seller
contained in Section 5.01 will survive the Closing, provided that
any claim based upon any alleged breach thereof must be asserted
in writing within twelve (12) months after the Closing.
(b) The only representations, warranties and agreements
of Purchaser hereunder that will survive the Closing are those
that are specifically stated herein to survive. The
representations and warranties of Purchaser contained in Section
5.02 will survive the Closing, provided that any claim based upon
any alleged breach thereof must be asserted in writing within
twelve (12) months after the Closing.
SECTION 5.05. NO OTHER REPRESENTATIONS OR WARRANTIES.
(a) Purchaser acknowledges that a material term of this
transaction for Seller is for Purchaser to purchase and accept the
Property on the Closing Date "as is" in its present condition,
based on its own due diligence review and inspection of the
physical and environmental condition of the Property (and subject
to Seller's representations and warranties contained in this
Agreement and in the documents to be delivered by Seller at
Closing (the "Closing Documents")) and all other matters
pertaining to the Property. Accordingly, Purchaser represents,
warrants and agrees that, except as expressly set forth in this
Agreement or in the Closing Documents, neither Seller nor any of
the employees, agents or attorneys of Seller have made any verbal
or written representations, warranties, promises or guaranties
whatsoever to Purchaser, whether express or implied, and, in
particular, that no such representations, warranties, promises or
guaranties have been made with respect to the physical or
environmental condition or operation of the Property, the actual
or projected revenue and expenses of the Property, the compliance
by the Property with applicable zoning, building, environmental or
other laws, regulations and rules, the quantity, quality or
condition of the articles of personal property and fixtures
included in the transactions contemplated hereby, the use or
occupancy of the Property or any part thereof or any other matter
or thing affecting or related to the Property or the transactions
contemplated hereby, except as, and solely to the extent, herein
or in the Closing Documents specifically set forth.
(b) Subject to Seller's representations and warranties
contained in Section 5.01 hereof and elsewhere in this Agreement
or in the Closing Documents, Purchaser agrees to accept the
Property "as is" in its present condition, subject to reasonable
use, wear, tear and natural deterioration of the Property between
the date hereof and the Closing Date, and Seller shall not be
liable for any latent or patent defects in the Property.
ARTICLE 6
COVENANTS OF SELLER
SECTION 6.01. COVENANTS OF SELLER. (a) From and after the
date of this Agreement until the Closing Date or earlier
termination of this Agreement, Seller shall (i) keep, maintain and
operate the Property in a businesslike manner and substantially in
accordance with Seller's past practices with respect to the
Property, and to the extent required of Seller under the Lease,
make any and all repairs and replacements reasonably required to
deliver the Property to Purchaser at Closing in its present
condition, normal wear and tear and damage by casualty excepted;
(ii) not further mortgage or voluntarily encumber all or any part
of the Property; (iii) promptly furnish Purchaser with copies of
all notices received by Seller relating to the Property
or the Lease; (iv) not receive or collect any rents from Garden
Ridge for a period of more than one month in advance; and (v) not
further pledge, encumber or assign the Lease.
(b) Within ten (10) days after the date of this Agreement,
Seller shall deliver to Purchaser an estoppel certificate in the
form attached hereto as Schedule 8.02(b) completed with all
applicable factual information for Garden Ridge for Purchaser's
review and approval prior to sending it to Garden Ridge. Promptly
following the end of the Approval Period, Seller shall send to
Garden Ridge such approved estoppel certificate for execution by
Garden Ridge. Seller shall, upon receipt, promptly deliver to
Purchaser a copy of all correspondence or other matters received
by Seller in connection with such estoppel certificate and shall
use its good faith efforts to assist Purchaser in obtaining
delivery of all such certificates.
(d) From and after the date that is three (3) days prior to the end
of the Approval Period and continuing to the Closing Date, Seller
shall not institute any proceeding or application for a reduction in
the real estate tax assessment of the Property for any tax year
without the prior written consent of Purchaser, which consent shall
not be unreasonably withheld, conditioned or delayed.
(e) Seller acknowledges that Purchaser will be seeking financing in
connection with its acquisition of the Property, and Seller agrees to
cooperate with Purchaser in its efforts to obtain a subordination, non-
disturbance and attornment agreement ("SNDA") from Garden Ridge, in
the form and to the extent requested by Purchaser's lender. Purchaser
shall prepare and deliver to Seller such SNDA and Seller shall,
promptly following receipt thereof, deliver it to Garden Ridge.
SECTION 6.02. CERTAIN MATTERS. Notwithstanding anything
contained in this Agreement to the contrary, Seller shall not
enter into any new leases for all or any portion of the Property
nor modify, amend, supplement, extend, renew or terminate the
Lease or consent to the surrender or assignment of the Lease
(unless such action is required by the terms of the Lease),
without obtaining Purchaser's prior written consent, which consent
may be withheld by Purchaser in Purchaser's sole discretion,
provided that Seller may enter into new service contracts without
Purchaser's consent so long as such service contracts are
terminable without penalty upon not more than thirty (30) days'
written notice.
ARTICLE 7
[INTENTIONALLY OMITTED]
ARTICLE 8
CLOSING CONDITIONS AND DELIVERIES
SECTION 8.01. CONDITIONS TO SELLER'S OBLIGATIONS. The
obligation of Seller to transfer the Property to Purchaser and to
otherwise consummate the transactions contemplated hereby shall be
subject to the satisfaction of the following conditions precedent
on and as of the Closing Date:
(a) all representations and warranties of Purchaser contained in
this Agreement shall have been true when made and shall be true in
all material respects at and as of the Closing Date as if such
representations and warranties were made at and as of the Closing
Date, and Purchaser shall have performed and complied in all material
respects with all covenants, agreements and conditions required by
this Agreement to be performed or complied with by Purchaser prior to
or at the Closing. At Closing, Seller shall execute and deliver to
Purchaser a Seller's Closing Certificate ("Seller's Closing
Certificate") in the form of Schedule 8.01(a) attached hereto,
certifying to Purchaser that all such representations and warranties
are true and correct in all material respects on and as of, the
Closing Date, with only such exceptions therein as are necessary to
reflect facts or circumstances arising between the date of this
Agreement and the Closing Date that would make any such
representation or warranty untrue or incorrect in all material
respects on and as of the Closing Date.
(b) Seller shall have received (directly or by delivery into
escrow with the Title Company) all of Purchaser's Closing Documents
(as set forth in Section 8.04 below).
(c) Seller shall have received payment of the Purchase Price in
accordance with Section 1.02 and such other amounts as are due Seller
hereunder.
SECTION 8.02. CONDITIONS TO PURCHASER'S OBLIGATIONS.
Purchaser's obligation to pay the Purchase Price, to purchase the
Property and otherwise consummate the transactions contemplated
hereby shall be subject to the satisfaction of the following
conditions precedent on and as of the Closing Date:
(a) subject to Section 5.04 hereof, all representations and
warranties of Seller contained in this Agreement shall have been true
in all material respects when made and shall be true in all material
respects at and as of the Closing Date as if such representations and
warranties were made at and as of the Closing Date, and Seller shall
have performed and complied in all material respects with all
covenants, agreements and conditions required by this Agreement to be
performed or complied with by Seller prior to or at the Closing Date.
At Closing, Purchaser shall execute and deliver to Seller a
Purchaser's Closing Certificate ("Purchaser's Closing Certificate")
in the form of Schedule 8.02(a) attached hereto, certifying to Seller
that all such representations and warranties are true and correct in
all material respects on and as of the Closing Date, with only such
exceptions therein as are necessary to reflect facts or circumstances
arising between the date of this Agreement and the Closing Date that
would make any such representation or warranty untrue or incorrect in
all material respects on and as of the Closing Date.
(b) Purchaser shall have received an estoppel certificate,
dated not more than thirty (30) days prior to the Closing Date,
substantially in the form of Schedule 8.02(b) hereto or in the form
required under the Lease, if different from the form attached as
Schedule 8.02(b), executed by Garden Ridge, showing (x) no material
economic discrepancies from the terms of the Lease as set forth in
the Lease delivered to Purchaser, (y) no delinquencies regarding the
monetary obligations and material non-monetary
obligations of Garden Ridge under the Lease, in each case
beyond applicable notice and cure periods, and (z) no uncured
material defaults of the landlord under the Lease.
(c) Seller shall have received and provided to Purchaser the SNDA
from Garden Ridge with respect to the Lease in a form acceptable to
Purchaser's lender.
(d) Purchaser shall have received all of Seller's Closing
Documents (as set forth in Section 8.03 below).
(e) The Title Company shall have agreed to insure at standard
rates fee simple title to the Property in an amount at least equal
to the Purchase Price and subject only to the Permitted Title
Exceptions.
SECTION 8.03. SELLER'S CLOSING DOCUMENTS. At the Closing,
Seller shall deliver to Purchaser the following documents duly
executed and, where appropriate, acknowledged by Seller, and the
following other items (the documents and other items described in
this Section 8.03 being collectively referred to herein as the
"Seller's Closing Documents"):
(a) a special warranty deed ("Deed") for the Land, in the form
annexed hereto as Schedule 8.03(a), together with customary title
affidavits;
(b) intentionally omitted;
(c) an Assignment and Assumption of Lease in substantially the form
annexed hereto as Schedule 8.03(c), whereby Seller will assign and
Purchaser shall assume all of Seller's right, title and interest,
including all the obligations of Seller, in, to and under the Lease;
(d) to the extent the same are in Seller's possession, a complete
set of keys for the Property;
(e) Seller's Closing Certificate;
(f) original, executed counterparts of the leases for the Property
or, if unavailable, photocopies thereof certified by Seller as true
and complete photocopies thereof;
(g) an affidavit of Seller pursuant to Section 1445(b)(2) of the
Code, stating that Seller is not a foreign person within the meaning
of such Section;
(h) written notice from Seller to Garden Ridge stating that the
Property has been sold to Purchaser and that Garden Ridge's security
deposits (if any) in Seller's possession have been transferred to
Purchaser, and directing Garden Ridge to make future rental payments
to Purchaser at the address designated by Purchaser;
(i) a closing statement setting forth adjustments provided for
hereunder;
(j) all books, records, correspondence files and
similar materials as are in Seller's possession, unless
previously delivered by Seller to Purchaser;
(k) all equipment operating manuals and all equipment
warranties and equipment guarantees, if any, in Seller's
possession;
(1) all certificates of occupancy, permits, warranties,
entitlements and plans and specifications, if any, related to
the Property to the extent that same are in the possession of
Seller or its property manager;
(in) all security deposits (if any of the security
deposits are in the form of letters of credit, Seller shall
deliver the original letters of credit to Purchaser, along
with completed assignment documentation necessary to transfer
the letters of credit to Purchaser at no cost to Purchaser);
and
(n) such other instruments and documents, in form and
substance reasonably satisfactory to Seller, Purchaser or the
Title Company, as may be reasonably necessary to effect the
Closing.
SECTION 8.04. PURCHASER'S CLOSING DOCUMENTS. At the Closing,
Purchaser shall deliver to Seller the following documents duly
executed and, where applicable, acknowledged by Purchaser (the
documents described in this Section 8.04 being collectively
referred to herein as the "Purchaser's Closing Documents"):
(a) counterparts of the documents described in Sections 8.03(c);
(b) Purchaser's Closing Certificate; and
(c) such other instruments and documents, in form and substance
reasonably satisfactory to Seller and Purchaser, as may be reasonably
necessary to effect the Closing.
SECTION 8.05. CONDITIONS GENERALLY. The foregoing conditions
are for the benefit only of the party for whom they are specified
to be conditions precedent and such party may, in its sole
discretion, waive any or all of such conditions and close title
under this Agreement without any increase in, abatement of or
credit against the Purchase Price.
ARTICLE 9
APPORTIONMENTS AND CLOSING MATTERS
SECTION 9.01. APPORTIONMENTS AND PAYMENTS. (a) The following
items shall be apportioned at the Closing as of midnight on the
day immediately preceding the Closing Date:
(i) Rents and all other charges (including common area maintenance
and other cost reimbursement payments) payable under the Lease.
(ii) All charges and payments for utility services which are not
charged directly to Garden Ridge; provided that if there is no meter
or if the current bill for any of such
utilities has not been issued prior to the Closing Date, the
charges therefor shall be adjusted at the Closing on the basis of
the charges for the prior period for which bills were issued and
shall be further adjusted when the bills for the current period
are issued.
(iii) All other operating income and expense from the
Property customarily prorated between a purchaser and seller in
the areas in which the Property is located.
If any of the foregoing cannot be apportioned at the Closing
because of the unavailability of the amounts which are to be
apportioned, such items shall be estimated using the most recent
data available and adjusted as soon as practicable after the
Closing Date.
(b) If any refund of real property taxes or assessments, water rates
and charges or sewer taxes and rents shall be made after the Closing,
the same shall be held in trust by Seller or Purchaser, as the case
may be, and shall first be applied to the unreimbursed costs incurred
in obtaining the same, and the balance, if any, shall be paid to
Seller (for the period prior to the Closing Date) and to Purchaser
(for the period commencing with the Closing Date).
(c) [Intentionally omitted]
(d) The amount of all net apportionments hereinabove provided for in
this Section 9.01 which is to be made at the Closing shall be
credited by the Title Company and/or Escrow Agent to the appropriate
party.
(e) If any proceeding for certiorari or other proceeding to
determine the assessed value of the Property or the real property
taxes payable with respect to the Property for any fiscal period of a
taxing authority which includes or precedes the Closing Date shall
have been commenced prior to the date hereof and be continuing ,as of
the Closing Date, Seller shall be entitled to control the prosecution
of such proceeding or proceedings to completion and to settle or
compromise any claim therein, with the consent of Purchaser, which
consent shall not be unreasonably withheld or delayed. Purchaser
agrees to cooperate with Seller and to execute any and all documents
reasonably requested by Seller in furtherance of the foregoing.
(f) (i) Within sixty (60) days following the Closing Date, Seller
shall deliver to Purchaser a statement detailing the cost
reimbursement payments and rents, if any, payable by Garden Ridge
under the Lease that are expressed as a fixed percentage or
percentages of the receipts of sales of the tenant ("Percentage
Rents"), in each case, which were billed to and collected from Garden
Ridge under the Lease through the period ending on the Closing Date.
Within a reasonable time after Purchaser has made its calculations of
the final cost reimbursement payments and Percentage Rents, in
respect of the fiscal periods which include the Closing Date,
Purchaser shall prepare and submit to Seller a fmal calculation (the
"Final Report") of the amounts and other items to be apportioned
pursuant to this Agreement as of the Closing Date. Seller shall raise
any objections it has to the Final Report within thirty (30) days
after the submission thereof by written notice to Purchaser given
within said thirty (30) day period and stating in reasonable detail
Seller's objections, and Purchaser shall allow Seller and its
authorized representatives reasonable access during business hours to
its books and records pertinent to the Properties to permit Seller to
review the Final Report and to ascertain its accuracy.
(ii) If Seller shall raise any objections to the Final
Report as provided above, the parties shall meet (by telephone or
otherwise) within ten (10) days after submission of Seller's
notice thereof and attempt to resolve such objections. If any
objections are not resolved within said ten (10) day period, such
objections may thereafter be submitted by the parties to an
independent real estate or accounting firm mutually acceptable to
the parties (or if the parties cannot agree on such a firm within
five (5) days thereafter, to the real estate consulting practice
of any "big four" accounting firm selected by Seller) for
determination, and such firm shall be instructed to render its
determination as soon as is reasonably practicable, but, in any
event, within fifteen (15) days of submission of the pertinent
information. The determination of such firm shall be fmal and
conclusive on the parties and judgment may be entered thereon in
any court of competent jurisdiction. The rules of the American
Arbitration Association applicable to commercial arbitrations
shall apply to ANY such arbitration.
(iii) The Final Report shall be deemed amended by
agreement of the parties or determination of such firm, and,
within ten (10) days after such agreement or determination (or, if
Seller raises no objections to the Final Report, the expiration of
the thirty (30) day objection period), Purchaser shall bill the
tenants therefore. Thereafter, Seller promptly shall pay to
Purchaser, or Purchaser promptly shall pay to Seller, as the case
may be, the amount determined to be due from such party to the
other in accordance with this Section 9.01 based upon the Final
Report, as the same may have been amended.
(iv) If a determination is required, the parties shall
bear the fees and expenses of the firm handling such determination
equally.
SECTION 9.02. Closing Matters. The following items shall be
provided for at the Closing:
(a) No insurance policies of Seller are to be transferred to
Purchaser, and no apportionment of the premiums therefor shall be
made. Purchaser acknowledges that it shall be responsible for
securing its own insurance for the Property.
(b) Seller will pay the following costs of closing this
transaction:
(i) One-half (1/2) of any escrow fees and all of the documentary
stamps and recording fees;
(ii) The fees and disbursements of Seller's counsel and any other
expense incurred by Seller in closing this transaction which is not
payable by Purchaser hereunder;
(iii) One-half (1/2) the cost of a standard form title insurance
policy (without extended coverage or special endorsements) in the
amount of the Purchase Price; and
(v) Any realty transfer taxes.
(c) Purchaser will pay the following costs of closing
this transaction:
(i) One-half (1/2) the cost of a standard form title insurance
policy (without extended coverage or special endorsements) in the
amount of the Purchase Price and the cost of title insurance in
excess of the standard form policy required to be delivered by Seller
as aforesaid,
(ii) The cost of an update of the Survey, if any, which shall be
required by Purchaser's lender;
(iii) The fees and disbursements of its counsel, inspecting
architect and engineer and any other consultants and advisors, if
any;
(iv) One-half (1/2) of any escrow fees;
(v) Any sales or use taxes relating to the transfer of personal
property to Purchaser; and
(vi) Any other expense(s) incurred by Purchaser or its
representative(s) in inspecting or evaluating the Property or closing
this transaction.
(d) Seller shall credit Purchaser with all security deposits
held by Seller in respect of the Lease and any prepaid rents or
other prepaid items.
SECTION 9.03. Survival. The obligations of the parties under
this Article 9 shall survive the Closing.
ARTICLE 10
CONDEMNATION AND DESTRUCTION; INSURANCE
SECTION 10.01. Condemnation. If, prior to the Closing Date,
Seller shall receive notice of a proposed taking of any portion of
the Property in an eminent domain or condemnation proceeding,
Seller shall notify Purchaser of such fact promptly after
obtaining knowledge thereof and Purchaser shall have the right to
terminate this Agreement by giving notice to Seller not later than
ten (10) days after the giving of Seller's notice. If Purchaser
elects to terminate this Agreement as aforesaid, the provisions of
Section 12.01(b) shall apply. If Purchaser shall not elect to
terminate this Agreement as aforesaid, there shall be no abatement
of the Purchase Price and Seller shall assign to Purchaser
(without recourse) at the Closing the rights of Seller to the
awards, if any, for the taking, and Purchaser shall be entitled to
receive and keep all awards for the taking of such Property or
such portion thereof
SECTION 10.02. Destruction. If, prior to the Closing Date, a
material part (as defined in this Section 10.02) of the Property
is destroyed or damaged by fire or other casualty, Seller shall
promptly notify Purchaser of such fact and Purchaser shall have
the right to terminate this Agreement by giving notice to Seller
not later than ten (10) days after the giving of Seller's notice.
For the purposes hereof, a "material part" of the Property shall
mean (i) a part of the Property the cost of restoring which, as
estimated by Seller, exceeds Five Hundred Thousand Dollars
($500,000), or (ii) fifteen percent (15%) or more of the leasable
area of the Property is damaged by fire or other casualty. If
Purchaser elects to terminate this Agreement as aforesaid,
the provisions of Section 12.01(b) shall apply. If Purchaser shall
not elect to terminate this Agreement as aforesaid, or if there is
damage to or destruction of an "immaterial part" (i.e., anything
other than a material part) of the Property by fire or other
casualty, there shall be no abatement of the Purchase Price and
Seller shall pay to Purchaser the amount of any deductible and
assign to Purchaser (without recourse) at the Closing the rights
of Seller to the proceeds, if any, under Seller's insurance
policies covering the Property with respect to such damage or
destruction, and Purchaser shall be entitled to receive and keep
any monies received from such insurance policies.
SECTION 10.03. Insurance. From the date hereof until the
Closing Date, Seller shall continue to carry, and shall keep in
full force and effect, casualty and all other insurance in an
amount not less than, with a deductible not greater than, and
affording substantially the same coverage as, the insurance
policies covering the Property as of the date hereof.
ARTICLE 11
BROKER
SECTION 11.01. Broker. (a) Purchaser represents and warrants
to Seller that it has not hired, retained or dealt with any
broker, finder, consultant or intermediary in connection with the
negotiation, execution or delivery of this Agreement or the
transactions contemplated hereby other than Westminster Realty
Company ("Broker"). Purchaser shall be responsible for all fees
and/or commissions payable to Broker in connection with this
transaction. Purchaser will indemnify Seller against liability
arising out of any breach of the aforesaid representation and
warranty.
(b) Seller represents and warrants to Purchaser that it has not
hired, retained or dealt with any broker, finder, consultant or
intermediary in connection with the negotiation, execution or
delivery of this Agreement or the transactions contemplated hereby
other than Broker. Seller will indemnify Purchaser against liability
arising out of any breach of the aforesaid representation and
warranty.
(c) The provisions of this Section 11.01 shall survive the Closing
and any termination of this Agreement.
ARTICLE 12
REMEDIES
SECTION 12.01. Remedies. (a) If Purchaser fails to perform as
required by this Agreement, in the time and manner set forth in
this Agreement, Seller, as Seller's sole and exclusive remedy, may
terminate this Agreement and receive payment in the amount of the
Downpayment as liquidated damages. Such termination shall be
effective five (5) days after Seller has given written notice of
its intent to cancel to Purchaser and Escrow Agent if Purchaser's
default is not cured within such five (5) day cure period. Upon
such termination, Seller shall be entitled to, and Escrow Agent
shall deliver to Seller, the Downpayment, as consideration for
acceptance of this Agreement, for taking the Property off the
market, and as the parties' best estimate of Seller's damages
resulting from Purchaser's default, but not as a penalty.
Such funds paid to Seller upon such termination shall be retained
by Seller as Seller's sole and exclusive remedy against Purchaser
in all respects, except for any indemnification obligations of
Purchaser contained in this Agreement.
(b) If, on the Closing Date, Seller shall be unable (as
opposed to unwilling) to perform its obligations or to satisfy any
condition applicable to Seller hereunder in accordance with the
provisions of this Agreement or title to the Property shall not be
in accordance with this Agreement, then Purchaser shall elect as
its sole and exclusive remedy, either (i) to direct Escrow Agent
to return the Downpayment and, upon such return of the
Downpayment, this Agreement shall be deemed terminated and Seller
shall not have any further liability or obligation to Purchaser
hereunder nor shall Purchaser have any further liability or
obligation to Seller hereunder, except for such liabilities or
obligations as are specifically stated to survive the termination
of this Agreement, or (ii) to waive such condition and proceed to
Closing. If Seller is unwilling to perform (as opposed to an
inability to perform) as required by this Agreement in the time
and manner set forth in this Agreement , then Purchaser shall
elect as its sole and exclusive remedy, either of the remedies
described in clauses (i) and (ii) above or to enforce specific
performance of Seller's obligations hereunder. It is agreed that
Purchaser may not commence an action against Seller for damages.
ARTICLE 13
NOTICES
SECTION 13.01. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been
duly given if (i) personally delivered with proof of delivery
thereof or sent by facsimile (confirmed thereafter by regular
United States mail) (any notice or communications so delivered
being deemed to have been received at the time delivered), or (ii)
sent by United States registered or certified mail, postage
prepaid (any notice or communication so sent being deemed to have
been received three (3) business days after mailing in the United
States), or (iii) by a nationally recognized overnight courier
service (any notice or communications so sent being deemed to have
been received at the time delivered); in each case addressed to
the respective parties as follows:
if to Seller:
AEI Real Estate Fund XVIII Limited Partnership
AEI Income & Growth Fund XXII Limited Partnership
AEI Income & Growth Fund 24 LLC
Attention: Robert Johnson
30 East Seventh Street, #1300
St.Paul, MN 55101
Robert & Lillian
Hajicek C/O Paul Hajicek
25699 Krueger
Avenue Chisago
City, MN 55013
Elizabeth Miller
2 Elmwood Way
Burlington, NJ 08016
Charles E. Miller III
P.O. Box 308
117 South Main Street
Grace, ID 83241
Christopher B. Miller
1325 Carter Crest Road
Edmonton, Alberta, Canada T6R-2L6
Jeffrey & Sylvia Harmon
41694 Higgins Way
Fremont, CA 94539
if to Purchaser:
Compson Holding Corporation
980 North Federal Highway,
Suite #314 Boca Raton,
Florida 33432
Attention: Mr. Michael
Comparato Facsimile:
(561) 391-8494
with a copy to:
Kronish Lieb Weiner &
Hellman, LLP 1114 Avenue
of the Americas
New York, New York 10036
Attention: Alan S. Cohen, Esq.
Facsimile: (212) 479-6275
or to such other address or party as either party may have
furnished to the other in writing in accordance herewith, except
that notices of change of address or addresses shall only be
effective upon receipt.
ARTICLE 14
MISCELLANEOUS PROVISIONS
SECTION 14.01. BINDING EFFECT. This Agreement does not
constitute an offer to sell and shall not bind Seller unless and
until Seller elects to be bound hereby by executing and delivering
to Purchaser an executed counterpart hereof (original or via
facsimile).
SECTION 14.02. INDEMNIFICATION GENERALLY. (a) Wherever it is
provided in this Agreement or in any agreement or document
delivered pursuant hereto that a party shall
indemnify another party hereunder against liability or damages,
such phrase and words of similar import shall mean that the
indemnifying party hereby agrees to and does indemnify, defend and
hold harmless the indemnified party and such party's direct and
indirect shareholders, partners, members, trustees and their
respective past, present and future officers, directors, employees
and agents from and against any and all claims, damages, losses,
liabilities and expenses (including, without being limited to,
reasonable attorneys' fees and disbursements) to which they or any
of them may become subject or which may be incurred by or asserted
against any or all of them attributable to, arising out of or in
connection with the matters provided for in such provision.
Neither party shall be required to indemnify the other for
liabilities caused by the gross negligence or willful misconduct
of the party seeking indemnification.
(b) If any action, suit or proceeding is commenced, or if any
claim, demand or assessment is asserted in respect of which a
party is indemnified hereunder or under any agreement or document
delivered pursuant hereto, the indemnified party shall give notice
thereof to the indemnifying party and the indemnifying party shall
be entitled to control the defense, compromise or settlement
thereof, at its own cost and expense, with counsel reasonably
satisfactory to the indemnified party, and the indemnified party
shall cooperate fully and make available to the indemnifying party
such information under its control or in its possession relating
thereto and may, at its own cost and expense, participate in such
defense.
SECTION 14.03. Partial Invalidity. If any term or provision
of this Agreement or the application thereof to any persons or
circumstances shall, to any extent, be invalid or unenforceable,
the remainder of this Agreement or the application of such term or
provision to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby,
and each term and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
SECTION 14.04. Entire Agreement. This Agreement, together
with the exhibits hereto, constitutes the entire agreement of the
parties regarding the subject matter of this Agreement and all
prior or contemporaneous agreements, understandings,
representations and statements, oral or written, are hereby merged
herein.
SECTION 14.05. Further Assurances. The parties agree to
mutually execute and deliver to each other, at the Closing, such
other and further documents as may be reasonably required by
counsel for the parties to carry into effect the purposes and
intents of this Agreement, provided such documents are customarily
delivered in real estate transactions in jurisdictions in which
the Property is located, and do not impose any material
obligations upon any party hereunder except as set forth in this
Agreement.
SECTION 14.06. Enforcement. In the event either party hereto
fails to perform any of its obligations under this Agreement or in
the event a dispute arises concerning the meaning or
interpretation of any provision of this Agreement, the party not
prevailing in such dispute shall pay any and all costs and
expenses reasonably incurred by the other party in enforcing or
establishing its rights hereunder, including, without being
limited to, court costs and reasonable attorneys' fees.
SECTION 14.07. AMENDMENT. This Agreement may not be modified,
amended, altered or supplemented except by written agreement
executed and delivered by Purchaser and Seller.
SECTION 14.08. GOVERNING LAW. This Agreement and the rights
of the parties hereunder, shall be governed by and construed in
accordance with the laws of the State of Florida applicable to
agreements made and to be performed wholly within said State.
SECTION 14.09. EXHIBITS AND SCHEDULES. All Exhibits and
Schedules referred to in this Agreement are incorporated herein
and made a part hereof as fully as if set forth herein.
SECTION 14.10 NO WAIVER. THE failure of any party hereto to
enforce at any time any of the provisions of this Agreement shall
in no way be construed as a waiver of any of such provisions, or
the right of any party thereafter to enforce each and every such
provision. No waiver of any breach of this Agreement shall be held
to be a waiver of any other or subsequent breach.
SECTION 14.11. HEADINGS; ARTICLE, SECTION AND EXHIBIT
REFERENCES. The Article and Section headings used herein are for
reference purposes only and do not control or affect the meaning
or interpretation of any term or provision hereof. All references
in this Agreement to Articles, Sections, Exhibits and Schedules
are to the Articles and Sections hereof and the Exhibits and
Schedules annexed hereto.
SECTION 14.12. NO OTHER PARTIES. The representations,
warranties and agreements of the parties contained herein are
intended solely for the benefit of the parties to whom such
representations, warranties or agreements are made, shall confer
no rights hereunder, whether legal or equitable, in any other
party, and no other party shall be entitled to rely thereon.
SECTION 14.13. COUNTERPARTS. This Agreement may be executed
and delivered in any number of counterparts, each of which so
executed and delivered shall be deemed to be an original and all
of which shall constitute one and the same instrument. Counterpart
copies executed by facsimile shall constitute originals.
SECTION 14.14. SECTION 1031 EXCHANGE. Notwithstanding
anything herein to the contrary, each party shall have the right,
prior to Closing, implement a "like-kind exchange" in accordance
with Section 1031 of the Code. Each party will cooperate with the
other, and take such actions as are reasonably requested to assist
the other party in transacting such Section 1031 exchange;
provided, however that neither party shall be required to incur
any additional cost or expense, and the completion of the Section
1031 exchange will not delay or postpone the Closing, in
connection therewith. The effectuation of a Section 1031 exchange
prior to Closing shall not be a condition or contingency to either
party's obligations hereunder.
[No Further Text]
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.
SELLER:
AEI REAL ESTATE FUND XVIII LIMITED
PARTNERSHIP, a Minnesota limited
partnership; AEI INCOME & GROWTH
FUND XXII LIMITED PARTNERSHIP, a
Minnesota limited partnership;
AEI INCOME & GROWTH FUND 24 LLC, a
Delaware limited liability company
By: /s/ Robert P Johnson
Robert P Johnson - President
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.
SELLER:
Jeffrey & Sylvia Harmon
By: /s/ Jeffrey Harmon
Jeffrey Harmon
By: /s/ Sylvia Harmon
Sylvia Harmon
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.
SELLER:
Robert & Lillian Hajicek
By: /s/ Robert Hajicek by Paul Hajicek P.O.A. 8/3/06
Robert Hajicek
By: /s/ Lillian Hajicek by Paul Hajicek P.O.A. 8/3/06
Lillian Hajicek
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.
SELLER:
By: /s/ Charles Miller
Charles Miller
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.
SELLER:
By: /s/ Christopher B Miller
Christopher Miller
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.
SELLER:
By:/s/ ELizabeth Miller
Elizabeth Miller
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.
PURCHASER:
COMPSON HOLDING CORPORATION
By: /s/ Michael Comparato
Name: Michale Comparato
Title: President
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the date first set forth above.
PROVISIONS REGARDING
DISPOSITION OF DOWNPAYMENT AND
TERMS OF ESCROW AGREED BY:
FIDELITY NATIONAL TITLE INSURANCE COMPANY, ESCROW AGENT
By: /s/ Anne Bostick
Name: Anne Bostick
Title: SR EO
AEI Fund Management, Inc.
1300 Wells Fargo Place
30 East Seventh Street
Sr. Paul, Minnesota 55101
651.227.7333
651.227.7705 (fax)
800.328.3519
www.aeifunds.com
September 13, 2006
Compson Holding
Corporation 980 N.
Federal Highway
Boca Raton, Florida
33432 Attention:
Michael Comparato
Re: Garden Ridge - Montgomery County, Texas (the "Property")
Dear Mr. Comparato:
Reference is made to that certain Contract of Sale,
dated August 17, 2006 (the "Contract"), between AEI Real Estate
Fund XVIII Limited Partnership, a Minnesota Limited Partnership
("AEI XVIII"), AEI Income & Growth Fund XXII Limited Partnership,
a Minnesota limited partnership ("AEI XXII"), AEI Income & Growth
Fund 24 LLC, a Delaware limited liability company ("AEI 24"),
Robert F. Hajicek and Lillian E. Hajicek, as individuals ("RHLH"),
Jeffrey D. Harmon and Sylvia M. Harmon, as individuals ("JHSH"),
Charles E. Miller III, as an individual ("CEM"), Christopher B.
Miller, as an individual ("BM"), and Elizabeth V.H. Miller, as an
individual ("EM"), collectively, as seller, and Compson Holding
Corporation, as purchaser for the captioned property. All terms
not otherwise defined herein shall have the meanings ascribed to
them in the Contract.
AEI XVIII, AEI XXII, and AEI 24 (the "AEI Entities")
hereby represent that the AEI Entities together are entitled to
receive seventy-nine percent (79%) of the net proceeds resulting
from the sale of the Property at the Closing. The AEI Entities
agree that in connection with the Closing, these AEI Entities will
together (and not individually) credit to Purchaser a total amount
equal to $325,000.00 (the "Credit"), which Credit will be
subtracted, in proportion to their respective ownership percentage
interests, from the sales proceeds otherwise due the AEI Entities
at Closing.
The undersigned AEI Entities acknowledge that their
delivery of the Credit to Purchaser at Closing is a material
condition to Purchaser's agreement to continue the transaction
contemplated in the Contract, without which Purchaser would
exercise its right to terminate pursuant to Section 4.01(d) of the
Contract.
Net Lease Property Financing. Ownership, Management
Since 1970
Please sign below to acknowledge your agreement herewith.
Very truly yours,
AEI Real Estate Fund XVIII Limited
Partnership, a Minnesota limited
partnership
By: AEI Fund Management XVIII, Inc.,
a Minnesota corporation, its
General Partner
By: /s/ Robert P Johnson
Name: Robert P Johnson
Its: President
AEI Income & Growth Fund XXII Limited
Partnership, a Minnesota limited
partnership
By: AEI Fund Management XXII, Inc.,
a Minnesota corporation, its
General Partner
By: /s/ Robert P Johnson
Name: Robert P Johnson
Its: President
AEI Income & Growth Fund 24 LLC,
a Delaware limited liability company
By: AEI Fund Management XXI, Inc.,
a Minnesota corporation, its
Managing Member
By: /s/ Robert P Johnson
Name: Robert P Johnson
Its: President
AGREED TO:
COMPSON HOLDING CORPORATION
By: /s/ Michael Comparato
Michael Comparato
President